Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (November 2011)
22 slides from Broadridge Financial Solutions's investor presentation, Nov 9, 2011
Slide 1: Continued Market Leadership through Execution and Innovation
Exhibit 99.1 Continued Market Leadership through Execution and Innovation Investor Presentation © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. November 2011
Slide 2: Forward-looking statements
Forward-looking statements This presentation and other written or oral statements made from time to time by representatives of Broadridge may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature,
Slide 3: Broadridge Strategy Statement
Broadridge Strategy Statement Our vision is to be the leading provider of Investor Communications and Technology and Operations Solutions to Bank/Broker-Dealers, Mutual Funds, and Corporate Issuers globally – We have strong positions in large and attractive markets with opportunities to grow – We ha
Slide 4: Broadridge is a strong, resilient business with significant growth potential
Broadridge is a strong, resilient business with significant growth potential History of market leadership – Proven ability to address increasingly complex customer needs through technology – Innovation and thought leader in industry for >40 years Strong position in large and attractive markets – Lea
Slide 5: Our market position is differentiated and sustainable
Our market position is differentiated and sustainable Investor Communication Services Securities Processing Services • Proxy services for >85% of outstanding shares in US • Processed >600 billion shares in 2011 • Used by >4,000 institutional investors Processes Enable Ranked #1 globally >$4 trillion
Slide 6: We are the leader in several markets
We are the leader in several markets Investor Communication Securities Processing Services Services 1 1 Market Rank Market Rank Bank/Broker-Dealer US Brokerage Regulatory #1 Processing #1 Communications US Fixed Income Broker-Dealer Processing #1 Transactional #1 Communications Canadian Brokerage Pr
Slide 7: Since spin-off, we have focused on the drivers of TSR
Since spin-off, we have focused on the drivers of TSR TSR driver Key actions 1 Portfolio Drive profitable growth Spending >$300M annually on technology Introduced >20 new products since spin-off Made several strategic acquisitions Divested Ridge and pruned underperforming products 2 Operational Impr
Slide 8: Since spin-off, we have reduced spin debt and returned capital
Since spin-off, we have reduced “spin debt” and returned capital Use of cash FY07–11, $M 281 392 1,263 191 1,072 213 395 155 198 Cash flow Capex FCF Freed-up Buy- Dividends Tuck-in Debt Change from (Non- capital backs¹ acquisi- reduction in cash² operations GAAP) tions (GAAP) Focus on prudent capita
Slide 9: Investor Communications (ICS) is a $10B+ market
Large and attractive markets – Investor Communications (ICS) is a $10B+ market Total addressable market $10B+ fee revenue Bank/Broker-Dealer (BBD)—Core Regulatory communications (proxy, interims, etc.) Mutual Fund—Natural adjacencies Customer communications Transaction reporting (transaction stateme
Slide 10: Technology and Operations (SPS) adds ~$14B to our addressable market
Technology and Operations (SPS) adds ~$14B to our addressable market Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% Total addressable market ~ $14B fee revenue US Brokerage Processing Core equities and fixed income Adjacent markets $1.
Slide 11: Our strategy is to leverage our market role to expand our client relationships
Our strategy is to leverage our market role to expand our client relationships Grow core Reinforce role as the industry thought leader to lead e-transition Bank/Broker-Dealer Drive growth in adjacent markets through new organic or Communications acquired solutions Leverage unique data hub position a
Slide 12: ICS Unique Business Systems Processing Model
ICS Unique Business Systems Processing Model PROXY & INTERIMS PROCESSING OVERVIEW "THE PLUMBING" Equity and Mutual Fund Shareholders Street-side Processing Registered Processing BROADRIDGE Broker/Bank 1 Proxy Processing System Issuer 1 / Fund 1 Over 8 million lines of code and approximately 500,000
Slide 13: ICS Product and Client Revenue Overview
ICS Product and Client Revenue Overview We have a strong and diverse product …and we have deep and longstanding offering… client relationships FY11 Product Revenues FY11 Client Revenues (Based on who pays BR as agent) Proxy $334M (21%) Mutual Fund (28%) Corporate Interims Distribution $704M (45%) Is
Slide 14: ICS-Bank/Broker-Dealer
ICS-Bank/Broker-Dealer What We Do: Competitive Advantages: Indispensible data hub with established Regulatory communications relationships with majority of BBDs – Beneficial proxy and interims for equities – Beneficial mutual fund compliance Strong market position and innovative communications leade
Slide 15: ICS-Mutual Funds
ICS-Mutual Funds What We Do: Competitive Advantages: Long-standing relationships across Mutual Fund trade processing in the industry defined contribution/trust space Serve every mutual fund and majority of (Matrix) bank/broker-dealers Data aggregation and analytics Unique data capabilities (Access D
Slide 16: ICS-Issuers
ICS-Issuers What We Do: Competitive Advantages: Beneficial proxy service Market Position – only full service provider of shareholder communications to all types of shareholders Registered shareholder communications – Registered proxy Unmatched Scale – able to leverage one billion plus – Interim comm
Slide 17: Securities Processing North America Market Share Overview
Securities Processing North America Market Share Overview¹ Equity Processing Client Volume FY11 Product Revenues Broadridge ~30% Competitors M ~20% A In-house ~50% R K U.S. $ Fixed Income Client Volume E Equity (~75%) T Transactions, $239M Broadridge Non-transactions, $211M Fixed Income (~15%) ~55%
Slide 18: Technology and Operations (SPS)
Technology and Operations (SPS) What We Do: Best-of-breed processing solutions – Leading global platform – Broad asset class coverage Broad suite of add-on or point solutions – Desk top applications used by brokers and traders – Workflow and reconciliation applications – Data aggregation and warehou
Slide 19: We plan to deliver strong Total Shareholder Return through FY14
We plan to deliver strong Total Shareholder Return (TSR) through FY14 Total Shareholder Return Operational Portfolio Financial strategy excellence Margin 35% payout 6–9% expansion that currently revenue from 13% to yields 2–3%, growth 17–19% plus buybacks Drive organic growth Leverage economies Gene
Slide 20: Our financial strategy is a key part of our value creation strategy
Our financial strategy is a key part of our value creation strategy 35% dividend payout, but expect no less than 64 cents per share Organic growth with limited financial risk – Avoid significant balance sheet risk – Invest in projects delivering at least 20% IRR Tuck-in acquisitions with clear growt
Slide 21: Broadridge's investment thesis
Broadridge's investment thesis 20
Slide 22: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures FY07–11, $M Free Cash Flow from Operations (GAAP) $ 1,263 Capex $ 191 FCF (Non-GAAP) $ 1,072 21
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